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Monday
Aug012011

Two Tea Party GOPers Say 'No' to Latest Debt Deal

ABC News(WASHINGTON) -- Given that Rep. Jason Chaffetz, R-Utah, and Rep. Jeff Duncan, R-S.C., both voted against the first version of the debt-ceiling legislation, it’s not surprising both told ABC News Monday they are voting against the latest negotiated deal.

Chaffetz told ABC News that he “can’t support it,” while Duncan said his “analysis of the plan is something I can't support.”

Even so, both believe the Tea Party came out a winner in the process.

“The fact that we're now having a serious discussion about debts where we're talking about cutting spending, that there's no tax increases that we're talking about right now, that's a huge, at least moral victory, I think, or a lot of fiscal conservatives that were concerned about the financial health of this country," said Chaffetz.

For Chaffetz, one big sticking point was the creation of the so-called Super Committee, a bipartisan group of 12 lawmakers who are charged with identifying another $1.5 trillion of deficit reductions.

“I really don't like the commission,” Chaffetz told ABC News. “You're centralizing power in 12 people. I don't know what they're going to come up with. We already have a bipartisan commission: It's called the United States House of Representatives and the United States Senate. It ought to be able to work its will, and so I'm not a fan of the commission, and I am a huge fan of the balanced budget amendment, and that's really the direction. I think if we want a solution -- not just a deal -- we really have to gravitate towards a balanced budget amendment, and I think it would get broad bipartisan support.”

Duncan cited the lack of a balanced budget provision and real serious deficit reductions as the key reasons for his “No” vote.  

Even though he’s voting against it, Chaffetz believes “a lot of Republicans, if not most Republicans, will support” the bill. 

Copyright 2011 ABC News Radio

Monday
Aug012011

GOP, White House Debate Effectiveness of Super-Committee

MANDEL NGAN/AFP/Getty Images(WASHINGTON) -- In the midst of trying to convince Republicans to vote for the debt deal, House GOP leaders are making the case that the “Super-Committee” – charged with identifying $1.5 trillion in deficit reduction by Nov. 23 -- will have a difficult time embracing a package of tax reform leading to new revenues.

The agreement calls for a 12-member bipartisan “Super-Committee” – officially called the Joint Select Committee on Deficit Reduction – that will identify $1.5 trillion in deficit reduction.

The debt deal says that the “Congressional Budget Office shall provide estimates of the legislation…including estimates of the effect of interest payment on the debt.”

House Republicans say the reliance on the CBO means that the Super-Committee’s hands will be tied.

Tax reform might mean a new tax code where everyone’s rates are lowered, but deductions are limited or non-existent. This, Democrats hope, would raise overall revenue while also making it more palatable to the public.

The White House says that as an added incentive for the Super-Committee to act – in addition to the onerous “triggers” the legislation calls for – the president will veto any further extension of the Bush tax cuts for the top two brackets when they next expire in January 2013. The president’s argument is: Make a new tax code that makes the Bush tax cuts irrelevant.

Republicans say since the Bush tax cuts are set to expire, the CBO is already anticipating and assuming $3.5 trillion in new revenue.

A senior White House official told ABC News the legislation “is no obstacle to revenue-raising tax reform. And the President will be making the case that this should be part of a balanced deal coming out of the Joint Committee.”

Copyright 2011 ABC News Radio

Monday
Aug012011

Debt Compromise Reached, but Will US Lose Its Credit Rating? 

ABC News(NEW YORK) -- Now that Congressional leaders and the president have struck a budget deal that, if passed by Congress, would prevent the U.S. government from defaulting, the country's pristine credit rating could still suffer a blow, raising the specter of an interest rate spike and a devastating ripple effect throughout the economy.

Earlier this month, the credit rating agency Standard & Poor's warned that the U.S. risked a downgrade to AA status if Congress doesn't lift the debt ceiling and reduce the total debt by $4 trillion over the next decade. Unfortunately, that risk remains even if the deal manages to navigate a rocky road through  Congress.

Viewed by politicians and pundits alike as overstepping, Standard & Poor's has come under fire for playing politics, and, some charge, they and other credit agencies should not wield so much power to determine the financial future of the country, particularly given the role they played in the credit crisis.

In a rare interview, the man who heads the global team at Standard & Poor's told ABC News' Jim Sciutto that reaching an agreement in Congress on a debt ceiling increase is hardly the "end of America's budgetary problems."

"If America keeps on doing what it's doing, which is having deficits of the kind it has at the moment, clearly, it's going to be looking out of place in that AAA-rated peer group," said Paul Coughlin, executive managing director of corporate and government ratings.

Asked if his company is interfering in politics, Coughlin told ABC News last week that Standard & Poor's is doing what ratings agencies do. "We are making real world observations about risk," he said. "We're just a rating agency, we just grade debt according to its relative safety or riskiness."

In the case of the U.S. government, which is rated at the top of the scale, he said, ratings agencies are looking to see how much "buffer of safety is there."

Copyright 2011 ABC News Radio

Monday
Aug012011

White House Confident Debt Deal Will Pass

Official White House Photo by Pete Souza(WASHINGTON) -- White House Senior Advisor David Plouffe says the White House is confident the debt deal will pass.

He says, “every member is going to have to make their own determination...We’re confident that this deal will and should pass.”

Obama received criticism for his own party who claim he gave into too many GOP demands. New York Times columnist Paul Krugman, even accused the president of “abject surrender” in reference to extending Bush tax cuts and the threat of a government shutdown in the spring.

Plouffe, however, denied that the president gave up too much stating:

“These are spending cuts that, you know, were identified largely on the front-end through the work the president and vice president did with the Congressional leaders.  They protect things like education, like medical research and this Committee is going to be charged, again, with doing the next stage but the enforcement mechanism, obviously, we wanted to do something that we thought protected the most vulnerable and that’s what this enforcement mechanism would do.”

ABC’S Jonathan Karl reports that 11 Senate Republicans are poised to vote no on the debt deal.  That should set up passage in the Senate with 70-plus votes, depending on how many Democrats vote no.

However, the House of Representatives is less likely to pass the deal. Tea Party favorite Rep. Allen West, R-Fla., sounded positive Sunday night, but 38 other House Republicans signed a pledge promising not to vote for any debt ceiling increase unless Congress first passes a balanced budget amendment.  

And there will be many other Republican no votes in the House. In fact, Republican no votes are likely in the 80 to 100 range, which means 76 Democrats must vote yes for the deal to pass.

Copyright 2011 ABC News Radio

Monday
Aug012011

Cut, Cap and Balance Coalition Won't Support New Debt Deal

MANDEL NGAN/AFP/Getty Images(WASHINGTON) -- As Speaker Boehner struggles to round up the votes needed to pass the new debt ceiling deal in the House, a coalition of conservative groups and lawmakers have already rejected the proposal.

This statement by the conservative Cut, Cap and Balance coalition certainly won’t help him pick up any Tea Party hold-outs:

"We applaud the efforts of the Speaker and Minority Leader to craft a passable solution despite a Senate majority that valued politics over prosperity and a White House that never presented any solution to the problem.  However, the Cut, Cap, Balance Coalition will not support this bill because it clearly fails to meet the standards of the Cut Cap Balance Pledge...The most glaring shortcoming is that the second debt ceiling increase in this package isn’t tied directly to Congressional approval of a balanced budget amendment as a pre-condition.  It may therefore be avoided altogether."

The Cut, Cap and Balance Coalition is an organization of more than 100 conservative groups and several dozen lawmakers in both chambers who have called for passage of a balanced budget amendment in exchange for a vote to raise the country’s debt ceiling.

Copyrights 2011 ABC News Radio

Monday
Aug012011

President Announces Agreement on Debt Deal

The White House(WASHINGTON) -- Faced with a looming economic crisis, the president announced Sunday evening in an address to the nation that “the leaders of both parties in both chambers have reached an agreement that will reduce the deficit and avoid default.”

With just two days left to raise the nation’s $14.3 trillion debt ceiling, the president urged members of both parties to “do the right thing” and support the deal.

The agreement cuts roughly $1 trillion is spending over the next ten years and establishes a bipartisan committee to report back by November with a proposal to further reduce the deficit, which will then be put before an up or down vote, according to the president.

The following is a portion of the press release outlining the agreement:

The debt deal announced today is a victory for bipartisan compromise, for the economy and for the American people. The agreement:

•    Removes the cloud of uncertainty over our economy at this critical time, by ensuring that no one will be able to use the threat of the nation’s first default now, or in only a few months, for political gain.

•    Locks in a down payment on significant deficit reduction, with savings from both domestic and Pentagon spending, and is designed to protect crucial investments like aid for college students.

•    Establishes a bipartisan process to seek a balanced approach to larger deficit reduction through entitlement and tax reform.

•    Deploys an enforcement mechanism that gives all sides an incentive to reach bipartisan compromise on historic deficit reduction, while protecting Social Security, Medicare beneficiaries and low-income programs;

•    Stays true to the President’s commitment to shared sacrifice by preventing the middle class, seniors and those who are most vulnerable from shouldering the burden of deficit reduction. The President did not agree to any entitlement reforms outside of the context of a bipartisan committee process where tax reform will be on the table and the President will insist on shared sacrifice from the most well-off and those with the most indefensible tax breaks.

Copyright 2011 ABC News Radio

Monday
Aug012011

Nancy Pelosi Statement on Debt Deal

JEWEL SAMAD/AFP/Getty ImagesWASHINGTON -- Democratic Leader Nancy Pelosi released the following statement after the President's speech Sunday on the ongoing talks to avert a default crisis:

"We all agree that our nation cannot default on our obligations and that we must honor our nation's commitments to our seniors, and our men and women in the military.

"I look forward to reviewing the legislation with my Caucus to see what level of support we can provide."

Copyright 2011 ABC News Radio

Monday
Aug012011

Herman Cain Wins Straw Poll in Denver

Steve Pope/Getty Images(DENVER)  -- Presidential candidate Herman Cain won the straw poll at the Western Conservative Summit in Denver over the weekend with 48% of the votes, followed by Texas Governor Rick Perry.  

“How about spectacular,” Cain said to ABC News when asked how he felt about winning. “I would say that winning the straw poll is not bad for somebody who has a 48% name ID and with a lot of people who didn’t really give me a chance.  I am doing as well as I’m doing for one simple reason.  My message is resonating with the people.  Secondly, my approach to problem solving, so I guess there’s two reasons, is resonating with the people, so that does make us feel really really excited.”

Cain gave a rousing speech at the summit Sunday morning, energizing the crowd with his message about American independent energy, immigration, and fighting the establishment.  Many people turned in their straw poll ballot before Cain’s speech and tried to switch their votes after hearing him speak, though the conference did not allow it.

On Saturday, Cain placed second in the Smart Girls Conference straw poll, losing to Rep. Michele Bachmann by only 4 votes.


Copyright 2011 ABC News Radio

Sunday
Jul312011

Obama Announces Congress Has Reached Debt Ceiling Agreement

Jim Watson/AFP/Getty Images(WASHINGTON) -- President Barack Obama on Sunday night announced that Congress had arrived at an 11th-hour bipartisan deal to raise the nation's debt ceiling and prevent an unprecedented United States default on its financial obligations. 

The deal, which Obama said was not the one he'd sought but which nonetheless required both Republicans and Democrats to make painful compromises, increases the U.S. debt limit by at least $2.1 trillion through 2013.

The plan also includes a trillion dollars in spending cuts, and creates a congressional commission to come up with another $1.5 trillion in cuts by November 23, largely through tax and entitlement reform. 

If that November deadline is not met, the president said, automatic cuts go into effect.  Those include $1.2 trillion in cuts to domestic and defense programs, but reportedly would not include cuts to Social Security, Medicare beneficiaries and programs for low-income Americans.

"This compromise does make a serious down payment on the deficit reduction we need and gives each party a strong incentive to get a balanced plan done before the end of the year," the president declared.

Copyright 2011 ABC News Radio

Sunday
Jul312011

WH Advisor David Plouffe Says No Budget Deal Reached Yet

Comstock/Thinkstock(WASHINGTON) -- White House senior advisor David Plouffe says there is no formal agreement between Congress and the White House on a final budget deal, but that the framework of a viable deal is shaping up as the Aug. 2 debt ceiling deadline nears.

"No, there's no deal," Plouffe told "This Week" anchor Christiane Amanpour on Sunday, before outlining the framework being discussed.

"Both parties agree that there is going to be a first stage deficit reduction - over a trillion dollars," Plouffe said. "There will be a congressional committee established. They're not going to reduce the deficit without tax reform and without entitlement reform."

Plouffe acknowledged that the current framework would not include tax revenue increases in the first stage, but said that would be up to appointed committee members to "get out of their comfort zone" in order to achieve deficit reduction.

"You're going to have to have closing of tax loopholes," Plouffe said. "You're going to have to have revenue produced to close the deficit."

Plouffe added that an enforcement mechanism being debated would apply pressure to the committee to reach long-term deficit reductions, as a combination of budget cuts and tax reforms would automatically be applied if the committee could not come to a consensus later this year.

"We're talking about a variety of options here," Plouffe said. "But the key principle is that the enforcement mechanism will be strong enough to compel both parties."

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